Anchoring Measurement of the Middle‐Income Class to Subjective Evaluation

What constitutes the middle class is hotly debated. Following an income‐based approach, a main issue concerns how to fix the income boundaries that define the middle‐income tier. This paper offers a novel model‐based approach to the use of self‐reported class evaluation for identifying those boundar...

Full description

Saved in:
Bibliographic Details
Published inThe Review of income and wealth Vol. 69; no. 1; pp. 60 - 75
Main Authors Pittau, M. Grazia, Zelli, Roberto
Format Journal Article
LanguageEnglish
Published Oxford Blackwell Publishing Ltd 01.03.2023
Subjects
Boundaries
Economic theory
Errors
Heterogeneity
Income
income boundaries
Kazakhstan
Measurement
Middle class
ordered logistic model
self‐perception
Social classes
Kazakhstan
Online AccessGet full text

Cover

More Information
Summary:What constitutes the middle class is hotly debated. Following an income‐based approach, a main issue concerns how to fix the income boundaries that define the middle‐income tier. This paper offers a novel model‐based approach to the use of self‐reported class evaluation for identifying those boundaries. The self‐declared status responses are modeled using a non‐conventional parametrization of an ordered logistic model. In this parametrization, the cut‐points of the model are directly interpretable as income boundaries, and the variance of the errors captures the idiosyncratic heterogeneity of the outcome variable. The use of subjective data is exemplified in the estimation of the middle class in Kazakhstan over the period 2003–2015.
Bibliography:We are grateful to Nicholas Longford, Francisco Ferreira, Maria Ana Lugo, and two anonymous reviewers for their useful comments and suggestions on previous versions of the paper. We also thank Luis Felipe López‐Calva, William Hutchins Seitz, Aibek Baibagysh Uulu, and participants at the ECAPOV HBSS seminar at the World Bank and at the IARIW‐World Bank Conference on “New Approaches to Defining and Measuring Poverty in a Growing World.” We are indebted to Sarosh Sattar for having involved us in the issue of shaping middle class in Kazakhstan.
Notes
Funding information: Open Access Funding provided by Universita degli Studi di Roma La Sapienza within the CRUI‐CARE Agreement. [Correction added on 21st May 2022, after first online publication: CRUI funding statement has been added.]
ISSN:0034-6586
1475-4991
DOI:10.1111/roiw.12553